- //doi.org/10.2172/1291137
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SRC-II Demonstration Project. Phase zero, task number 3: deliverable number 9. Volume 9. Market assessment: petroleum markets outlook, supporting reports. [Forecasting to 2000]
Technical Report
This report was prepared for Pittsburg and Midway Coal Mining Co. to project the world petroleum outlook to 2000, with emphasis on the US situation, but within the perspective of world energy and economic activity. In fact, the oil outlook - supply, demand, and most important, price - is derived by our system of balancing economic growth with energy supply, demand, and price. A single set of projections is adopted as the most probable as of June 1979, but the outlook may change as it has been changing over the past decade: In the early 1970s, we anticipated a rising real price for oil and considered that the true market price in 1973 was at least $5 a barrel (FOB Saudi marker crude) but acknowledged that how much above $5 a barrel was indeterminate. As it turned out, the market price was $10 a barrel. In 1974-75, we projected no real increase in the price of oil to 2000. In 1976-78, we projected that the real price would escalate at 3% per year to 2000. In this June 1979 outlook, we project rising real prices at 5% to 6% per year on a higher base for 1979. A major cause of this revision is the permanent loss of MMBD of production in Iran, or so the situation there is viewed. These changes have been caused principally by disappointments (except in Mexico) in exploration results. This in turn encourages some members of OPEC to constrain production still further. The last and most serious event is the dramatic decrease in Iranian production and the clear indication that 2 MMBD of the reduction is permanent.
- //doi.org/10.2172/5820303
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Sustainable energy in china: the closing window of opportunity
Book Feng, Fei; Priddle, Roland; Wang, Leiping; ...
China's remarkable economic growth has been supported by a generally adequate and relatively low-cost supply of energy, creating the world's largest coal industry, its second-largest oil market, and an eclectic power business that is adding capacity at an unprecedented rate. If energy requirements continue to double every decade, China will not be able to meet the energy demands of the present without seriously compromising the ability of future generations to meet their own energy needs. This title uses historical data from 1980 and alternative scenarios through 2020 to assess China's future energy requirements and the resources to meet them. It calls for a high-level commitment to develop and implement an integrated, coordinated, and comprehensive energy policy. The authors recommend eight building blocks to reduce energy consumption growth well below the targeted rate of economic growth, to use national resources on an economically and environmentally sound basis, and to establish a robust energy system that can better ensure the security of a diverse supply of competitively priced energy forms. Sustainability calls for persistence of effort, greater reliance on advanced energy technologies, and better standards enforcement. Achieving these goals will require policy initiatives that restrict demand and create a 'resources-conscious society', reconcile energy needs with environmental imperatives, rationalize pricing, and tackle supply security. While the challenges are daunting, China has a unique opportunity to position itself as a world leader in the application of cutting-edge energy developments to create a sustainable energy sector effectively supporting a flourishing economy and society.
- //doi.org/10.1596/978-0-8213-6753-7
Three Blind Men and the Elephant
Conference Long, J
Just like the blind men in the popular story of perceiving the elephant, the three major constituencies participating in the energy debate have greatly different perceptions of the problem. The constituency that is worried about climate change believes the energy problem is caused by profligate use of fossil fuel that has dramatically changed our atmosphere. The energy security group sees dangerous reliance on foreign sources of oil increasingly held by countries hostile to the US. The economic vitality group sees high energy prices and their effect on the economy and our life-style. Just like the blind men, each of the three constituencies perceives a different problem. And just as with the blind men, while each perspective is right as a piece of the elephant, it takes all the perspectives together to actually solve the problem. Environmentalists focus on solutions responding to the scientific consensus that greenhouse gases are creating rapid climate change. The tipping point has come: it is now a consensus position among scientists the global warming is being affected by anthropogenic activity to 90% certainty according to the last IPCC report. Although they still struggle with the prediction of how much global temperatures will rise if we do nothing--is it 5 deg or 10 under BAU? This group believes that we cannot afford to take a chance because we get only one chance. We can not afford to do this kind of experiment with the Earth. Any choice which decreases our CO{sub 2} footprint is favored, even if it means a decrease in standard of living. The energy security constituency sees the geo-politics of oil becoming increasingly dire. They look at oil money being used to fund anti-American activities of groups such as the Wahabis in Saudi Arabia, Hezbollah in Lebanon and the infamous Al Qaeda. They quip that the Iraq war is the first war where we are paying for both sides. They note Iran and the Shia throughout the Middle East seeing the possibility of controlling 2/3 of the world's oil. They see oil and gas being used by Russia to exert political power using the gas tap and Hugo Chavez in Venezuela clearly anti-American and now a virtual dictator who controls 15% of our oil imports. Conflicts in Nigeria over oil wealth and corruption affected our oil supply. Countries such as China are at best unwilling to join political action against countries such as Sudan that supply them oil, and at worst, selling them arms in order to cement their relationships with respect to importing oil. This security constituency favors ending our vulnerability by ending our ''addiction to foreign oil''. This group thinks that there is no domestic source of energy that is bad. They will be happy to see our corn turned into ethanol; our coal turned into liquid fuel for transportation. No matter that the price of tortillas doubles in Mexico, we expand corn farming at the expense of the environment, our tanks and pipes in gas stations corrode and leak, or we make liquid fuel from coal, thus increasing the carbon footprint by 30% per unit of energy. The economic vitality group sees increasing international demand for oil occurring simultaneously with a peaking supply of light sweet crude. They see an oil market where higher prices drive more production of oil which is heavier and more sour (supply follows demand). However, fast growth in world-wide demand increases even faster and prices will go up. For example, China adds 10,000 cars per month, and there is an uncanny correlation between the price of oil and the amount of oil imported by China. The security contingent also worries about reliability of supply as affected by pipeline leaks in Alaska or hurricanes or potential terrorism. This constituency thinks the problem is one of capacity and favors solutions that will increase oil production, reservoirs, pipelines and refineries. They believe that the energy system will be determined by the market and want solutions that favor investment in capacity. What the environmentalists don't seem to get is climate change by itself will fail to gather broad enough support to achieve the environmentalists goals. People will not likely choose to shiver in the dark for a climate problem which is intangible to them. Where environmentalists have been successful they have built coalitions with other constituencies. As an example, the renewable energy portfolio standards (RPS) in California, Nevada, New York, and Texas etc. are supported by people who want to lower emissions to protect air quality, or protect the state from energy supply crises or promote economic development within the boundaries of the state. The adoption of an RPS addresses a coalition of interests. In Nevada, there was an effort to change the RPS to a low-carbon portfolio standard. The effort failed because those who were interested in economic development or energy security in the state saw no benefit.
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A New Appraisal- Lessons from the History of Efforts to Value Green and High-Performance Home Attributes in the United States
Technical Report Mills, Evan
Rigorous consideration of green and high-performance (“green/HP”) features is rarely included in the property valuation process._ To help illuminate why this is the case, this report takes stock of the history of efforts to improve practices, and identifies barriers that have emerged and opportunities for overcoming them. Particular emphasis is placed on what energy and environmental policymakers and other stakeholders outside the appraisal community can contribute to the broader effort to advance professional practices. The history has unfolded in parallel with turbulent periods in the housing market for which appraisers and their customers are deemed to share responsibility, followed by cycles of regulations, siloing of appraisers in the name of professional integrity, and commoditization of the valuation process itself. This pattern has important ramifications for aspirations that appraisers engage more fully in identifying and valuing the green/HP characteristics of homes. On the one hand, it is legally and ethically incumbent on appraisers to do so, yet on the other hand it is perceived as a risky avenue to follow. Risks arise where findings can be challenged as either over- or under-stating value, together with a market environment in which the complexity of their assignments increases despite downward pressure on appraiser fees. While efforts to address green/HP considerations date back to the early 1980s, the vast majority of activity has taken place within the past five years. Many players have engaged in the efforts to promote improved valuation practices. These include the Appraisal Foundation, The Appraisal Institute, Colorado Energy Office, Earth Advantage, EcoBroker, Elevate Energy, Fannie Mae, Federal Housing Administration, Home Innovation Research Labs, The Institute for Market Transformation, Northwest Energy Efficiency Alliance, National Association of Homebuilders, National Association of State Energy Officials, National Association of Appraisers, RESNET, USEPA, USDOE and its National Laboratories, the U.S. Green Buildings Council, and the Vermont Green Homes Alliance. Many activities have resulted, ranging from trainings, to data-gathering instruments, and the emergence of a literature attempting to statistically isolate the effects of green/HP characteristics on home values. In some cases, the results of studies have been overgeneralized and oversold, and embodied flawed methods. Although the green/HP community has encouraged appraisers to focus on exemplary buildings (e.g., LEED or ENERGY STAR Certified), any level of green or energy performance can in fact influence value, including below-average performance (a.k.a. “brown discount”), irrespective of whether or not the building has been formally rated. This overly narrow focus represents a significant missed opportunity. Other surmountable challenges include limitations to non-appraisers’ understanding of the appraisal process (and practical constraints therein). A byproduct of this can be unrealistic expectations of what appraisers can and will do in the marketplace. These challenges notwithstanding, the environment for moving forward has improved. There is better data today (a critical need); expanded efforts to disclose energy use information (characteristics, consumption, bills); improved and more pervasive building energy codes, building rating and labeling initiatives; and a host of federal, state, and local policies that have collectively brought green/HP practices much more into the mainstream. Meanwhile, a renewed focus on professional standards of care and competency for assessing green/HP homes make it increasingly important for appraisers to consider these factors in their assignments. Despite the past four decades of studies, there is little if any discernible uptake of these practices by the appraisal practice at large. It would behoove interested parties to step back and consider what new strategies might be productive. A key element of any new plan should be to reset the nature of interactions with the industry, with the goal a more collaborative, two-way discussion to help improve outsiders’ understanding of the valuation process. It is not only the appraiser that needs to be engaged and could benefit from awareness raising. Homeowners, builders, lenders, utilities, insurance companies should also provide input on how green/HP factors impact property valuations and ways to accurately reflect these considerations in appraisals and real estate transactions more broadly. Given extensive inertia within the appraisal industry and a mixed history of interactions with the non-appraisal stakeholders, it is unlikely that the status quo will achieve much unless followed with more coordinated and persistent efforts. Workshops, studies, and memoranda of understanding will not on their own have much impact, and do not address deeper structural issues. Expectations are often unrealistic and not attentive to real-world constraints faced by appraisers. The report identifies key barriers impeding more thorough consideration of green/HP factors in residential real estate appraisals, and solutions for mitigating them. Barriers • Although industry standards of practice caution against bias of any sort, a skeptical predisposition towards “green” is reinforced by information deficiencies. • Information deficiencies result from the lack or difficulty of obtaining usable data on green/HP features in subject properties as well as valid sales comparisons or cashflow analyses. • Competency deficiencies, such as lack of conversancy in relevant technical topics, leads to oversights, and disjointed treatment of relevant information. • Time/cost pressure and process commoditization (e.g., template-based approaches) result from highly constrained budgets, quick turn-around times expected of appraisers, and standardized practices that were not developed with green/HP considerations in mind. • Professional differences between appraisers and sustainability professionals include divergent objectives, the former being market observers and the latter market influencers. • Risk aversion arises from multiple concerns including veracity, accuracy, and persistence of energy data, impacts of operational choices, new sources of appraiser liability associated with green/HP assessments, industry pressures not to over-value buildings or suggestion of bias, and concern about spending non-billable time on complex assignments. • A public policy vacuum has been created by disjointed and uncoordinated efforts from public-sector stakeholders, insufficient efforts to discuss and understand the appraisal industry and process, and a perception by some valuation professionals that green/HP is oversold. Opportunities • Elevating the competency of appraisers can be achieved through a combination of improved industry standards of care and equal-access training and professional development offerings. • Development of better information resources must focus on building-level information that provides robust documentation as well as aggregate sales-comparison data and other contextual information such as local codes, typical upgrade costs, energy prices, etc. • Improved energy benchmarking and rating tools could provide appraisers with information more well-adapted to their particular needs, which differ from those of typical audiences such as energy managers. • Better characterizing and managing risk will enable appraisers to cope with uncertainties in performance information, and help identify where risks may be introduced or mitigated by green/HP features, including higher costs or obsolescence of poorly-performing buildings. • Integrating disaster resilience and sustainability in appraisals would recognize important synergisms among these features, including durability and ability of green/HP buildings to better withstand external hazards. • Mitigating the problem of additional time/cost for performing assignments is an essential need that can be addressed by providing easier access to information and analytic procedures, perhaps coupled with new resources to defray the associated costs. • Enhancing demand for improved appraisals is a fundamental need, and depends on owners, developers, lenders, and others soliciting competent appraisers to perform scopes that expressly call out green/HP considerations, and to critically review the work product for compliance before acceptance. • Engaging new market participants, such as energy utilities and insurance companies can ensure fuller representation and participation of market stakeholders already engaged in green/HP activities and capable of furnishing valuable data and managing associated risks. Cutting across these individual activities, there is a need for outside stakeholders to formulate and follow a roadmap instead of piecemeal initiatives, bridging the professional/cultural divide between appraisers and green/HP communities, and tracking progress in order to know what is working. A more coherent communication and training strategy is needed, as the appraisal industry is highly fragmented, with two-thirds of appraisers opting out of membership in trade associations. In sum, while there is no silver bullet for advancing the practice of valuing green/HP features, there are concrete opportunities. Parties seeking solutions must identify barriers they wish to address and select from among potential initiatives that map to those barriers. Close collaboration with the appraisal community is critical, as non-appraisers have historically obtained limited traction with this industry due to lack of understanding of the nuances involved in the valuation profession. Large organizations and agencies should have a united approach; the perception or reality of a fragmented and uncoordinated strategy is unsettling for prospective partners in the appraisal industry. This requires improved communication and education within and among these communities.